Selling an EV Vehicle

[kg350]

Hi there,

I bought a 2018 Honda Clarity last year currently with 12,000 miles! I am planning to do my taxes next month and claim the $7,500 tax credit.

I live in California, so I got the $1,500 state credit. I plan on selling the car for another EV which is most likely to be a Model 3.

I know for the state credit (it states you have to keep the car for 30 months to keep the amount that was received which in this case is $1,500), I have to give back a prorated amount depending on how long I've had the car for, which is about 8-9 months. So I'll be roughly giving back around $1,100 back to the state.

But what about the tax credit of $7,500? I'm not able to find anything like I have for the tax credit. I bought the Clarity thinking 47 ev miles would satisfy me but I feel like a Model 3 with 300 miles would be better for me especially being able to charge at work for free!

But this will be a tougher decision if I have to give back all or some of the $7,500 back if I were to sell my car to get a Model 3.

Any ideas? Any input would be greatly appreciated

Thanks!

 

[bwilson4web]

Calling the IRS during the shutdown would probably take a long time. My understanding is the Federal Tax Credit is per car and there is no minimum ownership interval.

Bob Wilson

 

[Jimmy Truong]

Hi there,

I bought a 2018 Honda Clarity last year currently with 12,000 miles! I am planning to do my taxes next month and claim the $7,500 tax credit.

I live in California, so I got the $1,500 state credit. I plan on selling the car for another EV which is most likely to be a Model 3.

I know for the state credit (it states you have to keep the car for 30 months to keep the amount that was received which in this case is $1,500), I have to give back a prorated amount depending on how long I've had the car for, which is about 8-9 months. So I'll be roughly giving back around $1,100 back to the state.

But what about the tax credit of $7,500? I'm not able to find anything like I have for the tax credit. I bought the Clarity thinking 47 ev miles would satisfy me but I feel like a Model 3 with 300 miles would be better for me especially being able to charge at work for free!

But this will be a tougher decision if I have to give back all or some of the $7,500 back if I were to sell my car to get a Model 3.

Any ideas? Any input would be greatly appreciated

Thanks!

Tax credit per car and it’s not like the rebate which state gives you. Tax credit is your money from fed tax. You can sell the car next day and keep tax credit.


Sent from my iPhone using Inside EVs

 

[bwilson4web]

. . . You can sell the car next day [after registration rjw] and keep tax credit.

Bob Wilson

 

[Pushmi-Pullyu]

Calling the IRS during the shutdown would probably take a long time. My understanding is the Federal Tax Credit is per car and there is no minimum ownership interval.

I have seen at least one claim that you have to keep the car for at least 12 months after purchase, to fully qualify for the Federal tax credit. But I don't know if that's true. Someone needs to call the IRS help line and get that cleared up, but as Bob Wilson said, that's going to be difficult or impossible during the current government shutdown.

 

[Mike L]

Here's the code text (later amended to adjust the credit amount):

https://www.law.cornell.edu/uscode/text/26/30D

It says to qualify, the car must be "acquired for use or lease by the taxpayer and not for resale". So contra an earlier post, you'd probably have trouble getting away with buying the car Tuesday and selling it Wednesday, and claiming the credit.

A reasonable person would think a car you bought 8-9 months ago and put 12k miles on was not 'acquired for resale', but it's ambiguous enough that I'd expect the IRS to have guidance on how they determine that.